Saving is a ‘path to happiness’By Nick Maffeo
For too many people, saving sounds boring. Like they’re not going to have any fun … now or ever.
That is absolutely wrong.
Most of the people who think saving is boring usually end up in debt. Since incomes tend to be steady and expenses tend to rise, it can be a real temptation to “just put it on the card.” Before they know it, the debt plus interest plus outrageously expensive late fees and penalties add up and they’re behind the eight-ball. Talk about not fun!
People who don’t value the idea of saving often say things like, “Why bother? It’s not as if I’m going to save a million dollars or anything.”
Again, that is totally false! Every community banker knows plenty of people — regular people, not super-high-earners — who have saved close to that or more. Whether it’s actually a “million dollars” or not isn’t the point. Having significant savings is a goal that’s worth shooting for. With diligence and some luck, it can be achieved.
With 2015 just around the corner, here’s a challenge for the New Year: No matter where you’re at right now, make a commitment to start growing your savings — even if you only have a very small amount.
Because saving is a habit that’s worth getting into.
It starts with thinking differently — specifically, thinking saving can be more fun than spend-spend-spend. Exercise your “Say No!” muscle to some discretionary spending. Take full advantage of your company’s 401k match — that’s free money that gets left on the table too often. Open every bank and credit card statement and see if your money is going where you really want it to go.
At the very beginning, saving can be tough because just when you have built up your savings a bit, something comes along and you have to use your savings to cover it. That has happened to every saver. Two steps forward and one step back. Don’t let that deter you. Start over.
Some people find that saving successfully is easier when they split up their savings into three distinct “buckets” — one with about $1,000 for unexpected household expenses, a separate account for large and expectable expenses (college, braces, vacations, etc.), and a third “hands off!” account. That’s the really important one.
The goal of your “hands off!” account is to save so much that the interest and/or dividends on it can pay all or a significant part of your monthly expenses. That’s when saving equals freedom.
As the Wall Street Journal recently said, “Saving is a path to happiness.” True! But you have to keep at it because it doesn’t just magically happen.
(A good way to fund or replenish those three savings buckets? With weekly or monthly automatic transfers right from your checking account to your savings. It’s easy to set up, totally free, and the best way to “pay yourself first,” another super-simple saving strategy that works. Talk to your banker.)
Nick Maffeo is the president of Canton Co-operative Bank in Canton. Have a question? Email to firstname.lastname@example.org.
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